The Swiss Financial Market Supervisory Authority FINMA has identified serious shortcomings in anti-money laundering processes regarding private clients at Gazprombank (Switzerland) Ltd.

According to FINMA, the bank failed to look at people's business relationships and transactions closely enough. FINMA has banned Gazprombank from accepting new private clients until further notice.

In 2016, using information gleaned from the Panama Papers, FINMA began to investigate more than 30 Swiss banks. As part of its review it opened enforcement proceedings against Gazprombank (Switzerland) because it thought that the bank had broken its anti-money-laundering rules. Gazprombank Switzerland focuses primarily on corporate clients and, in particular, on trade finance and commercial lending, but in this case FINMA examined the manner in which the bank had done AML background checks on a number of business relationships involving private clients and politically exposed persons using offshore companies.

FINMA’s investigation, just completed, found that Gazprombank was in serious breach of its AML obligations between 2006 and 2016. In many cases, the way the bank categorised the risks that various business relationships posed was incorrect and sometimes it apportioned risk ratings too late in the day. In FINMA's terminology, it failed to "clarify the background of business relationships and transactions with the necessary depth and attention to detail."

The bank also failed to keep appropriate records of the transactions and relationships and frequently did not validate the documents it obtained. Sometimes it failed to report suspicious business relationships to the Money Laundering Reporting Office Switzerland (MROS) in time.

Many of these problems began at the bank's predecessor institution (Russian Commercial Bank Ltd) before 2009.

FINMA has banned Gazprombank Switzerland from expanding its activities with private individuals. It is not allowed to strike up any new relationships with private clients and the regulator has ordered it to monitor existing relationships most strictly. It must also recruit people from its board of directors to form a risk committee, most of whose members must be 'independent,' whatever that means.